CBD market prospects
CBD stands for cannabidiol — one of the dozens of cannabinoids that doesn’t have a psychoactive effect but rather is believed to help with diabetes, stress, anxiety, depression, and pain mitigation. It’s now being adopted in lots of industries, from the medical and pharmaceutical to health, wellness, and even food. If you wonder how to start a CBD ecommerce business and if it will be successful, here is some data.
According to Industry Research, the CBD market will grow at a mind-blowing 30.7% CAGR through 2024. This boom was initiated by the 2018 United States farm bill, or the Agricultural Improvement Act of 2018, which changed the regulations for hemp farming. Now more and more startups consider CBD website development.
In 2018, the global CBD market was valued at $2.3 billion; however, by 2025, it’s expected to grow into a $20–23 billion industry. BDS Analytics and Arcview are even more optimistic with their forecast, projecting the CBD market will reach $29.5 billion by 2024.
The market soared after CBD oil became legal in the US. The biggest CBD markets are in the US and Canada, though not all states allow CBD sales. Cannabidiol-related businesses expect more regulators to approve the sale of CBD products.
Currently, CBD can be present in these products:
- Food supplements
- Hair and skin products
- Pet products
- Vaping oils
In the next few years, CBD ecommerce development and sales are expected to grow even more significantly. So how can you sell CBD products if you want to enter this raising business right now? Our solution is to create your own CBD marketplace.
Benefits of creating a CBD marketplace
Where do people shop for CBD products? According to research, most people make offline purchases of CBD products from wholesalers in drugstores, but as CBD startups grow, most CBD products from suppliers will be sold online.
Some sellers and producers choose to offer their CBD products on existing online retail platforms. This is convenient until a retailer wants to go niche and provide unique branded products. When you need to concentrate more on your marketing strategy, a private online shop is a great solution. So let’s talk about this and other benefits of a CBD shop.
1. Be independent from large platforms
If you have your own CBD marketplace or store, you don’t need to worry about complying with platform rules, sharing your revenue, or being dependent on a platform’s search algorithms or manufacturers.
You’ll surely need to work on your SEO and content to optimize your website for search engines, but all this work will be an investment into a business that’s yours only.
2. Сhoose the perfect payment processor
Getting payments for CBD sales can be challenging because of government restrictions. For example, PayPal and Stripe don’t have any options available for CBD sellers.
To sell CBD, the main requirement is to use payment processor that’s not dependent on traditional banks. The benefit of selling CBD products from your own website is that you get to choose your payment processor according to these parameters:
- Supported locations
- Transaction fees
- Convenience and interface
- Integration with other payment gateways
These are some of the payment gateways you can use to sell CBD:
To sell CBD, you’ll need to use a payment processor that’s not dependent on traditional banks.
- USA ePay (must be using Paysafe as your merchant services provider)
- Worldpay eComm
Make your marketing and branding effective
Advertising your CBD products on large platforms can still be a challenge. With your own CBD shop, you can control your advertising and marketing. Naturally, your actions should still comply with the law, but you’ll get more flexibility and freedom.
With a branded shop, your brand also becomes more visible. You can easily go niche and avoid getting lost among hundreds of other brands. Although the competition in the CBD industry isn’t so fierce yet, each month new startups and companies launch, so it’s a good idea to find your niche as soon as possible.
Must-have features for a CBD shop
A CBD shop is basically an ecommerce website with the typical ecommerce functionality. However, in my opinion, it should do more than just sell and trade products: it also should educate users.
Let’s look at the must-have features of a CBD ecommerce shop to find out how to effectively sell your CBD products online.
Login and signup
Your users should have several ways to register on your website and log in. The best practice is to provide signup with an email or a social media profile such as Facebook.
A personal profile should include information about the user that they’re able to edit: payment methods, location, delivery address, etc. It should also show a user’s order history, order statuses, and other data. If you have a loyalty system, personal profiles should contain information about that too.
Pop-ups and subscription forms
If you use content or email marketing to promote your products, be sure to integrate pop-ups and subscription forms to grow your subscription base and lower the bounce rate on your website. This will also make your store show up higher in search results.
Think about your call to action buttons and their logic. Depending on your business goal, your CTAs may either lead to the next step in your sales funnel or encourage target actions like subscribing to your newsletter. Consider your customer journey when you create a CBD marketplace: this will help you place CTAs in the right spots.
Your catalog of products is the main part of your website. Be sure to add pictures, a product name, a short description, and possibly a rating for each listing.
After a user sees a product in the catalog, they’ll probably want to learn more about it. A product profile should contain product information, reviews, and ratings, and should show users that every product is labeled in accordance with the FD&C Act and other laws that are relevant to your country or state.
Filters and search
Implement filters and search so your users can find what they need easier and faster. You can make your search predictive so it suggests products before a user types the whole name.
To implement filters, you’ll need to think about your product category structure. This will help users navigate your website and allow them to find to find products faster by category.
Favorites is a separate page on your website that shows what products a customer likes. To encourage purchases, you can notify customers about discounts on their favorite products via email or web notifications.
The shopping cart is just one step on the way to a purchase. According to SaleCycle, around 76% of all online shopping carts are abandoned globally. On mobile devices, this rate is even higher, reaching almost 86%.
How much money can a CBD ecommerce make depends on how well you work with clients who abandoned their carts.
After your user chooses a product, it’s time to check out. Regular ecommerce websites lose customers not only at the shopping cart stage but at the checkout. If something goes wrong when checking out, most users won’t try again. So you need to make sure you don’t require too much information during checkout and that your website is credible.
To receive money for CBD products, you need to integrate a high-risk payment gateway. Banking and payments are tricky with CBD, so you need to choose your payment gateway carefully to run a CBD online store.
Also, you’ll probably won’t be able to accept payments from all credit cards. For example, Visa has stopped doing any business with CBD companies, so you’ll be able to accept payments only from Mastercard and Discover.
Reviews and ratings
Allow customers to leave reviews for each product you sell so that it’s easier for other customers to make a choice.
Today, customers buy most products online based on reviews and ratings, so don’t let your users go away from your website to learn more about the product: give as much information as possible on the spot.
When a user places an order on your website, inform them of every step: for example, that you’ve received the payment or shipped the order. This will keep users informed and make your website more trustworthy.
Allow your users to not only see the status of their orders but track the delivery. For this, you’ll need to integrate with one or several tracking systems that can give you information on your delivery service.
Chatbot or live chat
Should your users have any questions concerning their orders or your products, you need to be able to answer them quickly. Chatbots allow 24/7 support, as they’re able to answer basic questions automatically. It’s best to combine a chatbot with live human support chats so the chatbot can redirect complex questions to your support team.
If you want to establish your brand, increase sales, and make your website more credible, content marketing is a great strategy. It requires less investment than, say, paid ads while increasing the average check size.
On your blog, you can write about recent CBD studies, the positive impact of CBD in your products, and tips on using your products.
If you want to stand out, implement a loyalty program on your website. This will help you turn first-time customers into regulars. A loyalty program usually includes bonuses a user can collect and then exchange for special offers or toward purchases.
This is hardly a feature for an MVP, but you can add it later to increase sales and engage users more with your website. Gamification usually goes hand in hand with a loyalty program, and many retailers benefit from it massively. Come up with simple gamification and allow users to earn points to spend on your CBD products.
Additional features for a marketplace
If you want to create not just a shop but a platform for other CBD sellers, you’ll need additional features.
Now that you have sellers on your platform, you’ll need to allow them to register and create their own profiles. These profiles should include information about the seller and allow them to add, edit, and delete products. This means sellers need to be able to add pictures, descriptions, and prices.
To regulate relationships between sellers and buyers on your CBD marketplace, provide chats, support and policy for resolving disputes
When a buyer places an order, sometimes they need to communicate with the seller. For this, you need to implement a chat and web notifications so users can effectively communicate. Make it possible to attach photos or files to chat messages.
Order confirmation and status
When a seller is responsible for processing an order, they should be able to update the status of the order in their profile. This information should then immediately be available to the buyer.
To make your marketplace trustworthy and make it easy for customers to choose a seller, you’ll need rating functionality. Allow users to leave reviews and ratings for sellers.
Other things to consider
There are also some other development issues you’ll need to consider before you start to develop your website for CBD sales.
An admin panel is your control center where you can view and change content on your website, learn about your users, answer questions in a live chat, and get valuable data on how your software and business are performing.
Your admin panel should allow you to manage all the features on your website: for example, you should be able to moderate products that sellers publish (if you have a marketplace) or edit order statuses.
Analytics should be available in your admin panel, though you can also use a separate interface in Google Analytics or any other service you choose. Analytics is one of the most important features on your website and should be present at the very start of your project.
Analytics is important for CBD marketplace development, as it will allow you to see how your marketing strategy works, how many users you have, how often they purchase, and what you can improve to increase your sales. Google Analytics and Hotjar are the two most popular tools for website analytics.
To make an online CBD marketplace successful, you should make sure the design is outstanding. Though there aren’t so many competitors on the market right now, the stakes are high, and so are the standards. Your audience will probably consist of millennials and younger generations, so visual presentation is important.
Make sure you don’t cut corners on your UI/UX design. If your budget is limited, try to look for ways to save it without sacrificing the quality of your UI/UX. For example, you can outsource your design and CBD marketplace development to another country where talented developers charge less than in the US.
Starting a CBD business can be challenging because of all the legal issues and government restrictions, so you should pay careful attention to your product certifications and changes in relevant laws of your country or state. Until CBD products are totally approved by the US Food and Drug Administration, startups that want to jump on this train will need to deal with risks.
To save money on development and design to allocate them to marketing, consider to outsource development to a skillful remote development team
However, the CBD market is growing so fast that many startups are choosing to dive in right now. If you think about creating an ecommerce site for CBD products, make sure you invest heavily in design and marketing. To save money on development, I advise you to outsource it to a professional team abroad.
The price of your CBD marketplace will depend on what features you want to include and the hourly rate of the development you choose. If you want to get a detailed estimate of the cost of your CBD shop project, contact us and we’ll provide you with a consultation and a feature-by-feature estimate that includes CBD ecommerce web design, development and testing.
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